International Federation of Accountants Importance of

International Federation of AccountantsInternational Federation of Accountants

Importance of Reliable Financial Reporting Importance of Reliable Financial Reporting in the International Contextin the International Context

October 2005October 2005

• Over 2.5 million professional accountants Over 2.5 million professional accountants worldwide represented by over 160 IFAC worldwide represented by over 160 IFAC member bodies in 119 countriesmember bodies in 119 countries

• Contributes to every sector and aspect of the Contributes to every sector and aspect of the global economyglobal economy

The International Accountancy ProfessionThe International Accountancy Profession

The ProfessionThe Profession

Achieved through: Achieved through:

• Market-driven policiesMarket-driven policies

• TransparencyTransparency

• Sound corporate governanceSound corporate governance

• Credible financial reportingCredible financial reporting

Economic Stability and Growth Economic Stability and Growth

The Global EnvironmentThe Global EnvironmentThe Global EnvironmentThe Global Environment

Building a Global Financial Building a Global Financial Infrastructure Infrastructure

• Transparent financial reporting processTransparent financial reporting process

• Adherence to internationally recognized Adherence to internationally recognized

standardsstandards

• Well-designed regulatory structureWell-designed regulatory structure

• Consistent application of regulations Consistent application of regulations

• Robust corporate governance Robust corporate governance


Financial Reporting ProcessFinancial Reporting Process

• Contributes to financial decision makingContributes to financial decision making

• Characterized by integrity by all those in the Characterized by integrity by all those in the

financial reporting supply chain financial reporting supply chain

• Focuses on public interestFocuses on public interest

• Investors have roleInvestors have role


IFAC Standard SettingIFAC Standard Setting

• International Auditing and Assurance International Auditing and Assurance Standards Board (IAASB)Standards Board (IAASB)

• Ethics CommitteeEthics Committee• International Public Sector Accounting International Public Sector Accounting

Standards BoardStandards Board• Education Committee Education Committee • Member Body Compliance ProgramMember Body Compliance Program

IFAC Standard SettingIFAC Standard Setting

IAASBIAASB• Develops high-quality auditing, assurance and Develops high-quality auditing, assurance and

related services standards related services standards

• Members include practicing accountants, Members include practicing accountants, academics, and representatives of business and academics, and representatives of business and government government

• Has a thorough and transparent due processHas a thorough and transparent due process

• Obtains public input through CAG, as do other Obtains public input through CAG, as do other IFAC standard-setting committeesIFAC standard-setting committees

Standard Setting - IAASBStandard Setting - IAASB

Ethics CommitteeEthics Committee• Develops Code of Ethics applicable to accountants Develops Code of Ethics applicable to accountants

in public practice, business and government in public practice, business and government

• Code requires all accountants to act with integrityCode requires all accountants to act with integrity

• Code features principles-based approachCode features principles-based approach

• No member body or firm is allowed to apply less No member body or firm is allowed to apply less

stringent standardsstringent standards

• Current focus on updating guidance on Current focus on updating guidance on

independence independence

Standard Setting - EthicsStandard Setting - Ethics

International Public Sector Accounting International Public Sector Accounting Standards Board (IPSASB)Standards Board (IPSASB)

• Strives to improve public sector financial Strives to improve public sector financial

management and accountability management and accountability

• Issues authoritative international public Issues authoritative international public

sector financial reporting standardssector financial reporting standards

• These standards help to build credibility in These standards help to build credibility in

financial reporting by governments financial reporting by governments

Standard Setting – Public SectorStandard Setting – Public Sector

Education CommitteeEducation Committee• Develops standards and guidance for Develops standards and guidance for

education and development of professional education and development of professional accountantsaccountants worldwide worldwide

• Strives to achieve global quality and Strives to achieve global quality and

consistency in accounting educationconsistency in accounting education

• Underpins all standard-settingUnderpins all standard-setting

Standard Setting - EducationStandard Setting - Education

Member Body Compliance ProgramMember Body Compliance Program• Statements of Membership Obligations Statements of Membership Obligations

serve as the foundationserve as the foundation• Requires incorporation of IFAC and IASB Requires incorporation of IFAC and IASB

standards by member bodies standards by member bodies • Requires that member bodies have quality Requires that member bodies have quality

assurance and disciplinary programsassurance and disciplinary programs• Provides global snapshot of the profession Provides global snapshot of the profession

with information posted on IFAC website.with information posted on IFAC website.

IFAC Compliance ProgramIFAC Compliance Program

Value of International StandardsValue of International Standards

Contributes to --Contributes to --

• Efficient functioning of capital marketsEfficient functioning of capital markets

• Greater comparability of informationGreater comparability of information

• Investor confidenceInvestor confidence

ConclusionConclusionConclusionConclusion

International Federation of AccountantsInternational Federation of Accountants

www.ifac.orgwww.ifac.org

Documents

International Federation of Accountants Importance of